So as far as returns are concerned the real estate bubble clearly seems to have burst. And this is not surprising given the other data that Liases Foras has put out.
Property prices in the Mumbai Metropolitan Region (MMR) dropped by the maximum among leading metros during the quarter ended March 31, 2015 as unsold inventory in the island city has risen to 46 months ( almost four years!).
If the interest rates were to fall to 9 percent, the EMI would fall to around Rs 54,000. So, would the individual now buy a home just because the EMI will be around Rs 4,000 per month lower? Unless, home prices fall and builders start concentrating a little more on affordable housing, lower EMIs are not going to help.
Recent data released by the real estate research firm Liases Foras clearly shows that homes in Indian cities are terribly expensive.
Mumbai realty market is not driven by end-consumers but by investors.
Property prices are weak but given the structure of the industry, there is no real hope that prices will come down to affordable levels
As interest rates fall, demand will automatically pick up, but there might not be any significant rise in prices.